Atlantic Blue Selling Assets, Which Includes Alico

Tuesday

Jan 29, 2013 at 3:10 PM

WINTER HAVEN | Atlantic Blue Group, the Lake Wales company formed from the estate of the late Frostproof citrus baron Ben Hill Griffin Jr., plans to sell off its assets, a company director said Tuesday.

By KEVIN BOUFFARDTHE LEDGER

WINTER HAVEN | Atlantic Blue Group, the Lake Wales company formed from the estate of the late Frostproof citrus baron Ben Hill Griffin Jr., plans to sell off its assets, a company director said Tuesday.

Those assets include 3.7 million shares in Alico Inc., a public company based in Fort Myers that owns 130,400 acres of mostly agricultural land in Florida, including 8,200 acres in Polk County. The Atlantic Blue shares represent about 51 percent of outstanding shares.

Atlantic Blue on Tuesday filed a notice of intent to sell those shares with the U.S. Securities and Exchange Commission.

Also up for sale are three Atlantic Blue properties not part of Alico — Blue Head Ranch and Blue Head Farms on about 65,000 acres in Highlands and DeSoto counties and the 490-acre Tri-County Grove in Highlands County.

The Griffin heirs made the decision to sell off Atlantic Blue earlier this month because of a tax break arising out of the federal government's Jan. 2 deal to avoid the fiscal cliff of automatic tax increases, according to Baxter Troutman, an heir and member of the Atlantic Blue board of directors.

"This gives everyone the equal opportunity to get on with their lives," said Troutman, who holds the largest block of Atlantic Blue shares. "It's really that simple. We're not in financial trouble. We're not in a panic mode or a got-to-sell posture."

Troutman acknowledged the frequent disputes among family members in and out of the courtroom, including the 2000 lawsuit between Ben Hill Griffin III and the families of his four sisters that led to Atlantic Blue's creation. A final settlement was reached in 2003.

"When a family gets a certain size, different family members have different interests. It becomes unwieldy," Troutman said. "This decision (to sell off Atlantic Blue) has unified the family."

In addition to the three Highlands properties and Alico, Atlantic Blue also owns Phoenix Industries LLC, a trucking and warehouse company in Winter Haven, and other real estate interests, including two Winter Haven hotels.

David Koon, Atlantic Blue president and CEO, confirmed the sale of the Alico stock and the three properties but would not confirm or deny it planned to sell any other assets.

"We're evaluating our alternatives with respect to the hotels and Phoenix," Koon said. "We're not in a fire sale here. That's not the situation at all."

The decision to sell the Alico stock and the agricultural properties came after a financial adviser told family members the fiscal cliff deal created a tax break that affects only those assets Atlantic Blue held in 2007, Troutman said. Atlantic Blue changed to a Chapter S corporation under federal tax law that year.

Chapter S companies do not pay federal corporate taxes. Instead, any profits, losses or credits are passed through as income to the shareholders, who pay as part of their personal income taxes.

But the law provided that money earned on sale of any 2007 assets would pay both a corporate tax and be treated as the shareholders' personal income for the next 10 years, Troutman said.

The fiscal cliff agreement removed the double-taxation provision for assets sold in 2013, he said. Money from sale of those assets would pass through to shareholders under regular Chapter S rules.

"That saves about half of our normal taxes," Troutman said.

The tax break does not affect assets purchased after the Chapter S switch, he said. That includes Phoenix, purchased in 2008, and all other Atlantic Blue real estate holdings.

Atlantic Blue was formed in February 2004 after the settlement of a lawsuit between Ben Hill Griffin III, the citrus baron's only son, and the families of his four daughters: Sarah Alexander, Lucy Anne Collier, Harriet Harris and Francie Milligan. The estate's value was estimated at $300 million when Griffin Jr. died in 1990.

Troutman and former state Sen. J.D. Alexander are Griffin Jr.'s grandchildren. The heirs also include the late George Harris, CEO of the former Citrus and Chemical Bank, and his daughter, Katherine Harris, the former Florida secretary of state involved in the 2000 presidential election recount controversy and later a U.S. representative.

The lawsuit accused Griffin III of mismanaging the family estate to give himself a greater share of its assets.

As part of the settlement, the families of the Griffin daughters received Alico and the Blue Head properties among other assets. They eventually became assets in Atlantic Blue after the other heirs bought out the interests of the Harris family, who had sued challenging the settlement of the 2000 lawsuit.

John Alexander, Sarah's husband, is Alico's chairman and former chairman and CEO of Atlantic Blue until March 2005. He declined to comment Tuesday regarding sale of any assets.

Atlantic Blue and Alico have had a turbulent history since 2004.

In June, J.D. Alexander resigned from the Atlantic Blue board three months after quitting as CEO and chairman. The Ledger reported from anonymous sources the board forced Alexander out, but he denied it.

J.D. Alexander is CEO of Alico. The company in April settled a lawsuit brought by Troutman against the Alexanders alleging mismanagement. The terms were not disclosed.

In April, it reached a $838,000 settlement with the IRS over unpaid taxes for the years 2005 to 2007. The IRS initially sought $31 million in back taxes and penalties.

Alico stock closed Tuesday at $44.80, up $4.75, or 12 percent, on the NASDAQ exchange.

[ Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-401-6980. Read more on Florida citrus on his Facebook page, Florida Citrus Witness, http://bit.ly/baxWuU. ]